kyle paper - Gring 1 1. With the implementation of SFAS 123...

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Gring 1 1.
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With the implementation of SFAS 123 companies are now required to value stock options at their fair market value. This change in the accounting standard has had a discernible shift in how employees are compensated and is hindering the ability of small growth companies to succeed. In in this article , the topics that will be discussed describes the appropriate accounting treatment of reporting stock option compensation expense, the large shift in the content of income statement disclosure, and the impact that the accounting change has had on certain businesses and industriesLongest run on scentence…EVER This whole quote should be single spaced. Same as other quote. Single space it Make this sound better. . Prior to the release of SFAS 123, companies primarily reported measuring options at their intrinsic values. In fact only Boeing and Winn-Dixie company reported stock option compensation expense at its fair value in 2002 (Spiceland 2009). Most companies did not report stock option compensation expense at fair value because the current method was vitally beneficial because it decreased salary expenses and thus increased income. An example of a company reporting stock option compensation expense is Best Buy in 2000, which was while SFAS was a recommendation. In Best Buy's 10-K filing they reported stock option compensation as follows:
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As permitted by SFAS No. 123, the Company has elected to account for its stock option plans under the provisions of APB Opinion No. 25. Accordingly, no compensation costs have generally been recognized for stock options granted. Had the Company adopted SFAS No. 123, the pro forma effects on net earnings were reported at $347,070 and with compensation expense included into the financial statements the net earnings would have been $321,881 (Best Buy 2010Longest run on scentence…EVER This whole quote should be single spaced. Same as other quote. Single space it
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This note was uploaded on 04/05/2011 for the course ACC 310 taught by Professor Drogt during the Fall '10 term at Grand Valley State.

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kyle paper - Gring 1 1. With the implementation of SFAS 123...

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